Traders await Spanish bond auction
This morning, the yen has continued to retreat with the British pound continuing to out perform. Poor Japanese trade balance figures are behind this morning´s renewed yen weakness. There is a sense of ´wait and see ´ to the morning proceedings though as traders waiting to see what happens with today´s Spanish bond auction.
The GBP/ JPY is the leading pair, up 0.38%, with the other major yen pairs up around 0.25%.
Dollar pairs have a slight positive bias, with the GBP/USD again leading, up 0.13%. The rest of the dollar pairs are quiet so far with no significant movement to speak of. Gold continues to wallow in the doldrums.
The main announced to keep abreast of is the Spanish 10 year bond auction results which will be released at some point in the day. At 13.30 we have US unemployment claims, with a drop to 370k expected. At 15.00 we have existing home sales and the Philly Fed manufacturing index.
The pound and euro have diverged significantly in recent days, primarily on the back of better than expected UK data, persistent inflation and diminished expectations for more Quantitative Easing. The euro on the other hand is being held hostage to the ongoing concerns about nations such as Spain and Portugal.
The EUR/GBP is now stretched to the downside. For this closely correlated pair, this has more often led to a snap back rather than a continuation of the trend, which presents and opportunity.
A good way to play this on BetOnMarkets.com might be a HIGHER trade predicting that the EUR/GBP closes above 0.8200 in 1 days time for a potential return of 149%. The big risk is an unsuccessful Spanish Auction fuelling further downside, but there is an equal chance of this fuelling a big move higher.
Get this trade now, go to: http://goo.gl/kBjUf
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